Which of the Following Purposes Would Financial Statements Serve for External

question 100

Multiple Choice

Which of the following purposes would financial statements serve for external users?

• A)To find information about projected costs and revenues of proposed products.
• B)To assess employee performance and compensation.
• C)To assist in monitoring consumer needs and price concerns.
• D)To fulfill regulatory requirements for companies whose stock is sold to the public.
• E)To determine purchasing needs.

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Definitions:

Indirect Method

A financial reporting approach where cash flows from operating activities are derived indirectly by adjusting net income for non-cash transactions.

Communicating Bad News

The practice of delivering unfavorable or disappointing information in a thoughtful, sensitive manner.

Repair Relationship

The process of mending or improving the state of a relationship that has been damaged or strained.

Alternative Product

A product that serves as a substitute or choice in place of another in considerations of preference, requirement, or availability.